Goal: Increase Compliance
By far, the most significant increases in compliance can be seen by reducing the number of collection points for any tax. Fewer collection points means fewer opportunities for tax fraud. Fewer places for tax fraud to occur means that tax fraud is easier to detect and less money need be devoted to such policing.
Since changes in progressiveness, including a flat income tax, with a corporate or payroll tax component won’t change the number of collection points, it follows that changing progressiveness won’t make any difference.
A flat income tax that has no corporate or payroll tax component eliminates around 10.5 million business collection points, which represents only a slight improvement.
9-9-9 has all of the compliance problems of the current income tax and adds an additional layer, albeit a very minor one, of sales tax compliance.
The FairTax eliminates more than 145 million individual and several million non-retail business tax collection points. For tax fraud to remain as high under the FairTax, as it is today, the number of people willing to commit tax fraud would have to increase more than 14 fold. That’s just not going to happen, espceially since fewer tax collection points makes tax fraud easier to detect.
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